Manic: Quickly giving my kids their allowance without really explaining the value of their earned dollars.
Managed: Taking some time out of our busy week to have a good discussion about the value and importance of budgets and money. So when an expert offered to write a post about how to talk to your kids about finances, we happily agreed! We want to thank Kiley Theiring, a writer for Coupon Mountain. She shares tips on frugal living and she also maintains her own personal blog. And today she is our guest post writer.
How to Talk to Your Kids About Money
If you have children, you’ve undoubtedly had some sour shopping trips– the kind of shopping trip where your child throws the biggest, most embarrassing fit because you won’t let him buy a new toy. You might even have a teen nagging you to fund her latest wardrobe. Talking to your kids about money can be difficult, but it will help prevent money wars from starting in your household. Use the following tips to help you talk to your kids about your finances.
1. Be honest– Even if you are struggling financially, don’t be embarrassed to be honest with your kids. If they don’t understand why they can’t have something, they’re going to continue to throw fits and nag you until they get it. Simply explain that you cannot afford it because you need the money for essential things like food or housing.
2. Talk to them on their level — Money can be hard to understand, especially for young children. When talking to kids, use simple language and analogies that they can understand. If it helps, draw them little diagrams to show them how your budget works. This way, they can visualize the money flow in your household and they will respect your decision when you tell them no. Be sure to also explain where money comes from and how hard you have to work to earn it. Young kids often think the bank simply gives you money, making it hard for them to see why you won’t just buy them what they want.
3. Give them a way to earn money — Teaching kids the value of money is important and the best way to do that is to make them earn it themselves. Talk with your kids about what they can do to earn money. Set up a list of chores they can do to earn money if they are young or help them find a part-time job if they are older. This way, your children can understand how hard you work and they will think twice before begging you to buy them something.
4. Avoid frivolous spending, even in good times — The economy naturally rises and falls. Even if you are in a time of prosperity, don’t splurge on stuff for your kids. This sets expectations that you may not be able to follow through with later on if the economy begins to suffer. The sooner your kids learn about the value of money, the better.
5. Talk to your kids often — Kids can easily feel estranged from their parents, especially when parents insist on keeping “adult matters” to themselves. Every now and then, talk to your kids about what is going on in your life. Share your financial status with your kids so they can feel included in the family. Consider even having your kids help create the budget. This can be a great learning tool and it will make your kids feel like they are not being left out from family affairs.
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What are your tips when it comes to talking with your kids about money? Share here in the comments section.